Stock Portfolio Risk” Please respond to the following two part discussion:
(Part I) From the e-Activity Part 2, based on the current-day performance of the U.S. stock market, assess the level of risk to a financial institution holding stock within its portfolio. Make a recommendation for a buy, hold, or sell strategy for the next day’s trading activity. Provide a rationale for your recommendation.
(E-activity for Part I): Go to Bloomberg’s Website to review the current day’s performance of the U.S. stock markets at http://www.bloomberg.com/.
(Part II) Warren Buffet’s strategy related for his stock portfolio over the past several decades was to buy U.S. “blue chip” companies, paying high dividends, and hold the position for the long term. Assess the effectiveness of using this strategy in today’s marketplace, including the risk-reward relationship. Indicate your level of comfort with today’s financial institutions adopting this same strategy.